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MKT250
Second Test
| Answer | Question |
|---|---|
| Disintermediation | eliminating intermediaries such as wholesalers or distributors from a marketing channel |
| Reintermediation | the reintroduction of an intermediary between producers and users |
| NAICS | Provides a common industry classification system Data can be used to determine: Number, size, and geographic dispersion of firms Market potential / market share estimates Sales forecasts New customer identification |
| Types of Demand | Derived, Inelastic, Joint, Fluctuating |
| Derived Demand | Demand for business products results from demand for consumer products. |
| Inelastic Demand | A change in price will not significantly affect the demand for product. |
| Joint Demand | Multiple items are used together in final product. Demand for one item affects all. |
| Fluctuating demand | Demand for business products is more volatile than for consumer products. |
| Types of Business Products | Major Equipment Accessory Equipment Raw Materials Component Parts Processed Materials Supplies Business Services |
| Major equipment | capital goods such as large or expensive machines, mainframe computers, airplanes, and buildings |
| Accessory equipment | Less expensive and shorter-lived than major equipment, includes fax machines, personal computers, power tools |
| Raw materials | Unprocessed products, such as minerals, timber, wheat, corn, fish. Become part of finished products |
| Component parts | Finished items ready for assembly or that need very little processing |
| Processed materials | Used directly in manufacturing other products. Sheet metals, chemicals, and lumber. |
| Supplies | Consumable items that do not become part of the final product. Short lives and inexpensive. Generally fall into categories of maintenance, repair, or operating supplies |
| Business services | Expense items that do not become part of the final product. This includes janitorial, advertising, legal, management consulting, marketing research, and maintenance services. |
| Types of Buyers | Initiator, Influencers/Evaluators, Gatekeepers, decider, purchaser, user |
| Initiator | the person who suggests the purchase. |
| Influencers/Evaluators | help define specifications and provide information for evaluating options. |
| Gatekeepers | group members who regulate the flow of information, often the purchasing agent. |
| Decider | the person with the power to choose or approve the selection. |
| Purchaser | the person who negotiates the purchase. |
| Users | members of the organization who actually use the product. |
| Buying Situations | New buy, modified rebuy, straight rebuy |
| New Buy | A situation requiring the purchase of a product for the first time. |
| Modified Rebuy | A situation where the purchaser wants some change in the original good or service. |
| Straight Rebuy | A situation in which the purchaser reorders the same goods or services without looking for new information or investigating other suppliers. |
| Evaluative Criteria | Quality - refers to technical suitability Service - includes prepurchase as well as postpurchase service, along with dependability of supply Price - Buyers want to buy at low prices. Forces the supplier to quit selling to them |
| Strategic Alliance | Take the form of licensing/ distribution agreements, joint ventures, research, and partnerships. Businesses form strategic alliances to leverage technology, financial resources & market access by combining these with those of other firms. |
| Distribution structure | Business products typically have shorter channels of distribution, and direct channels are common. On the other hand, consumer products pass through a distribution system that may include the producer, the wholesaler(s), and the retailers. |
| Segmentation | the division of a market into meaningful, relatively similar, and identifiable segments or groups. |
| Geodemographic | Segmenting potential customers into neighborhood lifestyle categories. Combines geographic, demographic, and lifestyle segmentation. |
| Segmentation Variables | Geography, Demographics, Psychographics, Benefits Sought, Usage Rate |
| Ethnic Segmentation | Largest ethnic markets are: Hispanic Americans African Americans Asian Americans Companies must make products geared toward specific ethnic groups as they continue to expand |
| Family Life Cycle | Consumption patterns among people of the same age and gender differ because they are in different stages of the family life cycle stage. Series of stages determined by a combination of age, marital status, and the presence or absence of children. |
| Psychographics | Market segmentation on the basis of personality, motives, lifestyles, and geodemographics. |
| Usage Rate | Segmenting by usage rate enables marketers to focus efforts on heavy users or to develop multiple marketing mixes aimed at different segments. Based on the 80/20 Principle |
| 80/20 Principle | A principle holding that 20 percent of all customers generate 80 percent of the demand. |
| Satisficers | Business customers who place an order with the first familiar supplier to satisfy product and delivery requirements. |
| Optimizers | Business customers who consider numerous suppliers, both familiar and unfamiliar, solicit bids, and study all proposals carefully before selecting one. |
| Target Market | A group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges. |
| Cannibalization | a situation that occurs when sales of a new product cut into sales of a firm’s existing products |
| Product Differentiation | a positioning strategy that some firms use to distinguish their products from those of competitors. |
| Positioning | Attribute Price and quality Use or application Product user Product class Competitor Emotion |
| Perceptual Mapping | a means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers’ minds. |
| Repositioning | changing consumers’ perceptions of a brand in relation to competing brands. |
| Business Product | A product used to manufacture other goods or services, to facilitate an organization’s operations, or to resell to other customers |
| Consumer Product | A product bought to satisfy an individual’s personal wants |
| Branding | Branding has three main purposes: product identification, repeat sales, and new-product sales. The most important purpose is product identification. |
| Product Line Concepts | Advertising economies Package uniformity Standardized components Efficient sales and distribution Equivalent quality |
| Convenience Product | A relatively inexpensive item that merits little shopping effort |
| Specialty Product | A particular item for which consumers search extensively and are reluctant to accept substitutes |
| Unsought Goods | A product unknown to the potential buyer or a known product that the buyer does not actively seek |
| Shopping Product | A product that requires comparison shopping, because it is usually more expensive and found in fewer stores |
| Product Modification | Quality modification: change in a product’s durability. Functional modification: change in a product’s effectiveness, convenience, or safety. Style modification: an aesthetic product change (like color) rather than a quality or functional change. |
| Planned Obsolescence | The practice of modifying products so those that have already been sold become obsolete before they actually need replacement. |
| Product Line Extension | Adding additional products to an existing product line in order to compete more broadly in the industry. |
| Brand Equity | The value of company and brand names |
| Brand Loyalty | a consistent preference for one brand over all others, is quite high in some product categories. |
| Global Brand | a brand that obtains at least a third of its earnings from outside its home country, is recognizable outside its home base of customers, and has publicly available marketing and financial data. |
| Manufacturers Brand | Heavy consumer ads by manufacturers Attract new customers Enhance dealer’s prestige Rapid delivery, carry less inventory If dealer carries poor quality brand, customer may simply switch brands and remain loyal to dealer |
| Private Brand | A brand name owned by a wholesaler or a retailer. Also known as a private label or store brand. |
| Family Brand | brand—common names for different products or a Combination of individual branding and family branding. |
| Trademark | the exclusive right to use a brand or part of a brand. Others are prohibited to use without permission. |
| Service Mark | performs the same function for services. |
| Co-Branding | placing two or more brand names on a product or its package. Ingredient Branding Cooperative Branding Complementary Branding |
| Package Functions | The three most important functions of packaging are to contain and protect products; promote products; facilitate the storage, use and convenience of products, and facilitate recycling and reduce environmental damage. |
| Labeling | Persuasive - Focuses on promotional theme Consumer information is secondary Informational - Helps make proper selections Lowers cognitive dissonance |
| Greenwashing | Attempting to give the impression of environmental friendliness whether or not it is environmentally friendly. |
| Universal Product Codes | A series of thick and thin vertical lines (bar codes), readable by computerized optical scanners, that represent numbers used to track products. |
| Warranties | Warranty- A confirmation of the quality or performance of a good or service. Express Warranty - A written guarantee. Implied Warranty - An unwritten guarantee that the good or service is fit for the purpose for which it was sold. |
| Diffusion | process is the process by which the adoption of an innovation spreads. |
| Adoption | Five categories of adopters: Innovators: First 2.5% who adopt the product. Early adopters: Next 13.5% to adopt. Opinion leaders. Early majority: Next 34% to adopt. Late majority: Next 34% to adopt. Skepticism. Laggards: Last 16%. Tradition. |
| New Product Development | Creation of prototype Sketch marketing strategy Packaging, branding, labeling Promotion, price, and distribution strategy Manufacturing feasibility |
| New Product Strategy | a plan that links the new-product development process with the objectives of the marketing department, the business unit, and the corporation. |
| Screening | The first filter in the product development process, which eliminates ideas that are inconsistent with the organization’s new-product strategy or are inappropriate for some other reason. |
| Concept Test | a test to evaluate a new-product idea, usually before any prototype has been created. Often successful for line extensions. |
| Business Analysis | the preliminary figures for demand, cost, sales, and profitability are calculated |
| Simultaneous Product Development | A new team-oriented approach to new-product development where all relevant functional areas and outside suppliers participate in the development process. |
| Test Marketing | The limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation. |
| Simulated Market Testing | Advertising and other promotional materials for several products are shown to members of the product’s target market. These people are taken to a mock or real store where their purchases are recorded. |
| Commercialization | Ordering Materials Production Inventory Buildup Distribution Shipments Sales Force Training Trade Announcements Customer Advertising |
| Innovation | a product perceived as new by a potential adopter. |
| Product Life Cycle | A concept that provides a way to trace the stages of a product’s acceptance, from its introduction (birth) to its decline (death). |
| Profit Oriented Pricing | objectives include profit maximization, satisfactory profits, and target return on investment. |
| Sales Oriented Pricing | Market Share and Sales Maximization |
| Elasticity of Demand | Availability of substitutes Price relative to purchasing power Product durability A product’s other uses Rate of inflation E= Percentage change in quantity demanded of good --------------------- Percentage change in price of good |
| Elasticity of Demand2 | If E > 1, demand is elastic. If E < 1, demand is inelastic. If E = 1, demand is unitary. |
| Yield Management Systems | A technique for adjusting prices that uses complex mathematical software to profitably fill unused capacity. |
| Break Even Pricing | Break-Even Quantity = Total fixed costs -------------------- Fixed cost contribution |
| Revenue | The price charged to customers multiplied by the number of units sold. |
| Profit | Revenue minus expenses. |
| Profit Maximization | Setting prices so that total revenue is as large as possible relative to total costs. |
| Return on Investment | Net profit after taxes divided by total assets. ROI = Net Profit after taxes --------------------- Total assets |
| Sales Maximization | Short-term objective to maximize sales Ignores profits, competition, and the marketing environment May be used to sell off excess inventory |
| Status Quo Pricing | seeks to maintain existing prices or to meet the competition’s prices. This category requires little planning, and is essentially a passive policy. |
| Demand | The quantity of a product that will be sold in the market at various prices for a specified period. |
| Supply | The quantity of a product that will be offered to the market by a supplier at various prices for a specific period. |
| Price Equilibrium | The price at which demand and supply are equal. |
| Selling Against the Brand | They place well-known brands one the shelf at high prices next to other brands—usually private label brands—at lower prices. |
| Keystoning | The practice of marking up prices by 100 percent, or doubling the cost. |
Created by:
Youngj723
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